AI copyright law reform – data mining exception proposed

View PDF

Authored by: Jamie Cheung

Did you know?

A new copyright defence which could allow the reasonable use of copyright works for training their AI models without permission from copyright owners is under consideration in Hong Kong.

On 8 July 2024, the Hong Kong Government launched a two-month public consultation on amending the Copyright Ordinance in light of the importance of AI to Hong Kong’s technological and industrial transformation and the development of a digital economy.

The consultation paper proposes to introduce a new exception to copyright infringement for certain “text and data mining” (TDM) activities for both commercial and non-commercial use. Such TDM activities would include not only conventional text and data mining, but also computational data analysis and processing for enhancing the performance of a computer program, such as the development, training and enhancement of AI models.

As for copyright protection of AI-generated works, the Government is of the view that the existing Copyright Ordinance already provides sufficient flexibility to accommodate computer generated works. Similarly, the paper also considers that existing legislation and market practice is sufficient to address the issue of copyright infringement arising from AI-generated works.

Why does this matter to you?

The proposed new TDM exception will be of particular interest to content creators and copyright owners, whose works may be used to train AI, as well as AI developers and end users, who may be accused of copyright infringement by copyright owners. However, general software developers and anyone who conducts text and data mining or computational analysis of data should also take note. The exception could have a significant impact on the copyright licensing environment in Hong Kong. In contrast with the UK, the proposed TDM exception may not be limited to non-commercial research purposes. The UK Government recently proposed expanding their exception to cover commercial uses as well, but the proposal was withdrawn due to concerns from copyright owners.

As emphasized in the consultation paper, any TDM exception must strike the appropriate balance between the interests of copyright owners and users such as the growing AI industry. Of course, the precise wording of the exception in Hong Kong is yet to be seen, some suggested safeguards include:

• requiring lawful access to the copyright work, so that the exception will not apply if licensing schemes are available, or the copyright owners have expressly reserved their rights (giving owners an option to opt out); and
• imposing restrictions on further dealings with the copy made under the exception.

Moreover, like other copyright exceptions, it will be subject to the primary consideration that the use of the copyright work does not conflict with a normal exploitation of the work, or unreasonably prejudice the legitimate interests of the copyright owner.

As regards copyright subsistence and ownership, the consultation paper considers AI-generated works to be covered by “computer-generated works” under the existing Copyright Ordinance, such that the “person by whom the arrangements necessary for the creation” of an AI-generated literary, dramatic, musical, or artistic work will be taken to be the author and first owner of copyright in it. The Hong Kong position is in line with the UK, but contrasts with jurisdictions such as the US, where the strict requirement for “human authorship” of works currently means that AI-generated works are not eligible for copyright protection.

However, even if there is protection of computer-generated works under the copyright law in Hong Kong, identifying the “arranger” may not be simple. The question of whether the developer/programmer/trainer of the AI model, the operator of the AI system, or the user who inputs the prompts is the necessary arranger (and the first copyright owner), may need to be determined on a case-by-case basis.

As to copyright infringement arising from the creation or use of AI-generated works, the paper is of the view that the current law is sufficient to address the issue. However, determining the liability of parties such as the AI developer, the system operator, or the end-user will depend on the facts, having regard to the role of the party and degree of involvement in the infringement. This would need to be considered on a case-by-case basis, but the basic principles that apply are no different from determining copyright infringement involving non-AI-generated works.

Interested parties have until 8 September 2024 to submit their views on the consultation.

Deacons’ award-winning Intellectual Property Department has a wealth of experience in advising stakeholders on public consultations and copyright law. For advice on how the proposed TDM exception may affect you or your industry, or how the use of AI fits into existing copyright laws, please contact us.

Key Contacts

Kelley Loo

Partner | Intellectual Property

Email or call +852 2825 9575

Theresa Luk

Partner | Intellectual Property

Email or call +852 2825 9482

Charmaine Koo

Consultant | Intellectual Property

Email or call +852 2825 9300

Eliza Siew

Counsel | Intellectual Property

Email or call +852 2826 5345